Should you buy Callon Petroleum after the 16% dip on Friday?

By: Ansh Rathod
Ansh Rathod
Ansh was a technical analysis expert for Invezz. He has written many articles that showcase his advanced technical analysis… read more.
on Nov 29, 2021
  • It is now trading 20% lower than the new all-time hit high earlier this month.
  • CPE has a strong demand zone at $50, this is a crucial zone.
  • A target of $65 can be set, and a potential new all-time high could also be hit in the coming months.

Shares of independent oil and natural gas company Callon Petroleum (NYSE: CPE) fell by over 16% on Friday, it is now trading 20% lower than the new all-time high hit earlier this month. CPE showed great growth over the past year as it almost quadrupled in price, investors are now taking this chance to buy the dip before it starts rallying again. 

The most probable reason for the fall in the price could be the fall in the price of oil due to fear of covid restrictions returning because of the possible outbreak of the omicron variant. Should you buy CPE amidst the panic amongst investors?

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Here is what the charts are pointing towards?

  • After hitting a new all-time high of $65, CPE has fallen by over 20% and has now reached an important support level. This level could be a make or break level for CPE, thus investors must be patient before taking any positions.
  • CPE has a strong demand zone at $50, this is a crucial zone as a breakdown from this zone could cause CPE to fall down to the $40 price zone, thus any long entries should only be taken once a clear reversal is seen.
  • A long entry can be taken once CPE starts rising again, which will show that it has taken support from the demand zone, an early entry could be risky as CPE could still break down.
  • CPE has broken the 50-day moving average after several months, however, if it is able to go back above the moving average a reversal could be seen soon.
  • A target of $65 can be set, and a potential new all-time high could also be hit in the coming months.
  • Investors must be cautious and set a stop-loss below the zone.

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